Bangladesh Bank (BB) on Sunday introduced Environment Risk Management (ERM) guidelines to assist the financial sector in assessing environmental risks before making credit decisions.  The ERM guidelines were inaugurated by the central bank’s Governor Atiur Rahman.  Atiur was chief guest at the seminar titled “Environment Risk Management Guidelines,” which was held at a hotel in Dhaka.
The guidelines were developed by BB in collaboration with the International Finance Corporation (IFC), UKAID and Norad.  The Banker’s Association and financial sector stakeholders also provided input about how to manage environmental risks in the financial sector.
BB governor also urged the Chief Executive Officers (CEOs) of the  banks to pay attention to green banking, by investing in energy efficiency and renewable energy projects.
Among others, the launching ceremony was attended by Ian Crosby, manager of IFC advisory services in Bangladesh, Kyle F. Kelhofer, IFC’s country manager for Bangladesh, Bhutan and Nepal, as well as high executives from financial institutions.
BB’s governor said, “These guidelines will help standardise the approach to environmental risk management and it will facilitate banks operating on a level playing field.”
He added that financial institutions will be encouraged to adopt the guidelines to promote their reputation and manage risk efficiently.
“Banks who comply with the instructions stipulated in the ERM guidelines will become a part of the Green Banking Policy,” he said.
“Financial institutions must be proactive. In addition to identifying and understanding the risks in financing in the Bangladeshi business climate banks should actively considering investment opportunities in energy efficiency and renewable energy projects,” the central bank governor said. He requested IFC to continue its work in the sustainable energy finance sector and to advise banks about sustainable energy finance deals.
Ian Crosby said, “The ERM guidelines, if adopted by local banks, will encourage sustainable project financing.”
The guidelines can be found on BB’s website, under Regulations and Guidelines: http://www.bangladesh-bank.org.

News: The Independent/ Bangladesh/ 18-Apr-2011